EU-Russia Centre calendar

In an opinion editorial Ekho Moskvy radio political talk show host Yulia Latynina says that Dutch bureaucracy killed Alexander Dolmatov. She argues that the Dutch system is a self-perpetuating machine that imports lumpens while pocketing charitable funds. It does not provide real assistance to political refugees. This tragically flawed system has to answer for its misdeeds.

In an opinion editorial Oleg Kashin, a correspondent and columnist for the magazine Russian Life, says that the circumstances surrounding Russian activist Alexander Dolmatov’s recent suicide raise questions about concern for human rights in the West. During the Cold War, Western public opinion was resolutely on the side of harbouring persecuted Soviet dissidents. But as the European Union has drawn closer to Russia economically, interest in Russian human rights has waned, except when developments are so outrageous – like the assassination of the journalist Anna Politkovskaya in 2006 – that they cannot be ignored.

A guest post by Stephan Mergenthaler and Andrew Bishop, deputy head and project manager respectively of the Strategic Foresight practice at the World Economic Forum, spells out Russia’s economic challenges. It concludes that Russia needs to pursue structural reforms, but stresses that because of the tight interplay between energy revenues, institutional reforms and the country’s social cohesion, piecemeal approaches are bound to disappoint. The most promising way for Russia to thrive is for the country to develop institutions open and flexible enough to face the forces reshaping its future both within and beyond its borders.

Here is published an opinion editorial by Anders Åslund, a senior fellow at the Peterson Institute for International Economics in Washington, in which he outlines nine reasons why stability in Russia may be elusive. Among the top five, he lists the possibility that oil prices may finally fall, the fact that the regime is completely dependent on one person, President Vladimir Putin, and the endemic state of corruption in Russia, which renders the country inherently unstable. The article also notes that up until a year ago, revitalising economic and political reforms appeared likely, but that is no longer the case. Under such circumstances, the unpredictable may suddenly happen.

Gas consumption dropped by 3.7% in Europe in 2012, while electricity demand stayed relatively stable. France is the only country in Europe that witnessed an increase in demand for both gas and electricity. For now, this fall in gas demand has had no impact in prices. Thierry Bros, an analyst at the Société Générale, is quoted as saying: “Gazprom has played the role of a ‘swing supplier’ by accepting a reduction on supply in order to maintain prices.”

Here is quoted Alexander Medvedev, Gazprom Export’s CEO, as saying: “We hope this partnership will allow us to efficiently use the vast helium reserves of Oriental Siberia.” The companies plan to start working at the Chayandinskoye field in Siberia in 2018.

Gazprom and France’s Air Liquide have signed a memorandum of understanding with a view to jointly develop helium deposits in eastern Siberia. Gazprom said in a statement: “According to terms of the MOU, Air Liquide and Gazprom Export intend to study forms of strategic cooperation such as joint production, transportation, storage and marketing of helium within the Helium Project framework.”

Gunvor and the Novorossiisk Commercial Sea Port have closed a $110 million, seven-year loan for their jointly owned Novorossiisk Fuel Oil Terminal on the Black Sea. The deal marks another foray into the loan market for Gunvor, which has tapped this source of financing a number of times over the past 12 months, sealing deals worth more than $2.5 billion.

European energy companies have shown little interest in the Greek energy sector following a decision by the Greek government to press ahead with moves to privatise it. Western European companies had initially shown interest, but concerns about the future of Greece in the eurozone led them retract interest. The largest bidders are Russian energy companies Gazprom and the Sintez Group, which worries western diplomats, as Greece could become increasingly important in the European energy market. Greece will likely turn into a corridor for European gas supply in the future.

First Deputy Prime Minister Igor Shuvalov has said that BP raising its stake in Rosneft shows Russia’s willingness to surrender control over the country’s largest oil producer as the state cuts its business holdings. He said: “Once we have BP as a major shareholder, a private international company, the whole picture changes.” He added: “I don’t think it is possible to have BP as a shareholder and say, ‘we do what we want’.” He also stated that the changes happening at Rosneft are “very, very healthy,” and insisted the government would like to see additional asset swaps or direct share sales as it continues to reduce its stake.

Russian government is willing to authorise private companies to operate the vast Arctic hydrocarbon resources although this will not apply to foreign companies. Deputy Prime Minister Arkady Dvorkovich said: “Regarding foreign companies, no change is planned. They will be able to operate as technological partners, but never hold an operating licence.” Until now, operating licences have only been granted to state-owned companies with at least five years of offshore experience in Russia, so only Rosneft and Gazprom. But LUKoil is ready to invest $2.7 million in exploration. Rosneft and Gazprom have expressed their concerns about opening the exploration business up to Russian competition, claiming these projects are too complex from a technological and environmental point of view. But the government is willing to carry on with it, though under strict conditions.

European Energy Commissioner Günther Öttinger has said Germany must turn away from its go-it-alone energy shift and work more with the European Union to build a cost-efficient, secure and sustainable sector more independent of Russia. Regarding Germany’s energy partnership with Russia, Öttinger stressed that Berlin should not drop solidarity with other member states. Öttinger, who has often criticised Russia’s use of energy as a geopolitical tool, said: “If Russia continues its strategy of divide and rule…the net effect will be losses for Europe on the whole.”

Rosneft CEO Igor Sechin thinks $120 billion is his company’s fair capitalisation. Speaking during a meeting with President Vladimir Putin, Sechin said: “Rosneft’s total capitalisation is currently $92 billion.” Asked about Rosneft’s potential for further capitalisation growth, Sechin said that, given the current international state of affairs and effective work, $120 billion would seem to be a fair estimate.